Achieving Competitive Advantage through Managing Supply Chain Excellence: The Case of Thai Garment Industry

The purpose of this research is to understand the relationship between supply chain enablers and firm performance within the Thai garment industry, which is mediated by competitive advantage. The findings reveal that the proposed model has a significant mediating effect of competitive advantage. In terms of the causal path model, IT capabilities and supply chain integration are the key enablers contributing to firm performance. On the other hand, they reveal that supply chain integration is the only key enabler contributing to competitive advantage. The findings also reveal that, the most critical set of the supply chain enablers contributing to firm performance is a combination of IT capabilities and integration via competitive advantage. This study demonstrates that, firms need to incorporate supply chain orientation into their business strategy and supply chain should be an absolute core of a firm’s business model, in the competitive environment of Thai garment industry. 1. Literature Review The primary objective of SCM is to increase the value of products and services to customers in the supply chain vis -àvis improved customer service and quality, and lower inventory carrying costs. The value created by a firm’s SCM efforts clearly supports organizational strategy. Successful SCM can result in lower system inventories, a network of firms that responds more quickly to market changes, and products that more closely match customer exp ectations. Thus, firms pursuing differentiation, cost leadership, or quick response strategies, or combination of these can all find benefits from the value system or supply chain management (Porter 1985). The SCM concept and its associated activities continue to evolve as new communication technologies and cooperative efforts having emerged to facilitate system-wide process integration. The seminal work by Porter (1980, 1985) has formed the basis for the development of supply chain enablers and their ties to a firm’s competitive advantage and firm performance. Further, Teece, Pisano, and Shuen (1997) provided an explanation of how a firm’s specific asset position and uniqueness shape its competitive advantage. The relevant constructs of this study are defined as follows: Supply Chain Enablers – These are the drivers that deliver supply chain outcomes (Marien 2000). For the purpose of this research, supply chain enablers are defined as, the underlying factors that influence firm performance. Firm Performance – The information regarding the processes and products results which allows the evaluation and comparison, in relation to goals, patterns, and past results, with other processes and products. Also, it is important to highlight that a managerial performance evaluation system needs to be focused on results, which should be guided by stakeholders’ interests (Silvio and Carlos 2001). Information Technology Capabilities – The capability to exchange data in a timely fashion, responsive and usable format (Bowersox, Closs, and Stank 1999). Supply Chain Capabilities – Tangible and intangible assets that are firm specific and created over time through complex interactions among resources (Chang 1995; Teece, et al.,